SpaceX Stock Deals: Internal Documents Reveal Investor Perks

SpaceX Employee Share Sales and Investor Opportunities

Similar to many startups experiencing significant growth, SpaceX periodically facilitates opportunities for its workforce to liquidate portions of their equity through sales to pre-approved external investors.

An internal SpaceX document detailing a tender offer from May 2022 was reviewed by TechCrunch. Elon Musk recently mentioned on X that such sales for employees are conducted approximately every six months.

Recent Valuation and Document Re-Release

Considering SpaceX’s most recent tender offer in December 2024, as reported by CNBC, which established a company valuation of $350 billion, we are presenting a re-publication of our initial analysis of this document, originally released in June 2024.

These records provide valuable perspectives on the investors authorized to acquire these secondary shares, and the favorable terms they receive.

Share Pricing Discrepancies

The document indicates that investors paid $70 per share to employees during this particular offer. This represents a substantial discount when contrasted with the share prices paid during primary investment rounds – those where the company directly issues shares to raise capital.

In 2022, during a primary sale, shares were priced at $270. SpaceX has not offered shares in a primary round at $70 since its Series G, which was valued at $77.46 per share, as per PitchBook data from 2015.

Common vs. Preferred Stock

The significant price difference is primarily attributable to the fact that employees hold common stock, while investors in primary rounds typically acquire preferred stock. Preferred stockholders are entitled to dividends and have priority in receiving their investment back in the event of a company sale.

Liquidation Preferences

This document reveals that, as of 2022, SpaceX would have been obligated to distribute the first $6.67 billion to preferred shareholders in a sale scenario. Subsequent fundraising of $750 million suggests this initial payout amount to investors should now be increased accordingly.

However, given SpaceX’s current estimated valuation of $350 billion, these liquidation preferences are unlikely to pose a concern for employees or common stockholders. A sale for less than $7 billion, however, could result in common stockholders receiving no return.

Dividend Considerations

Internal documents examined by TechCrunch in 2019 indicated that SpaceX had not yet issued any dividends. Should the board of directors choose to declare dividends, they would be distributed in fixed amounts, dependent on the timing of the initial share purchase.

These amounts vary from a few cents per share for early investments to over $10 per share for later, more expensive acquisitions.

Stock Split in 2022

Employees benefited from a 10-for-1 stock split of Class A, B, and C common shares in February 2022. Preferred shares were not subject to this split. The distinctions between the different classes of common shares are not clarified in the documents.

In publicly traded companies, differing classes of shares often carry varying voting rights, allowing founders to maintain control while still offering shares for sale.

Limited Liquidity Options

Currently, secondary sales like these represent one of the primary avenues for SpaceX employees to monetize their shares, as the company’s timeline for a potential public offering remains uncertain.

Recent Price Trends

The $70 per share price in this sale represented an improvement over the previous tender offer of $56, adjusted for the stock split, as reported by Bloomberg. Bloomberg also indicated earlier in 2024 that subsequent tender offers could reach $108 to $110 per share.

In December, reports surfaced that investors were prepared to offer as much as $185 per share.

Investor Access in the 2022 SpaceX Offering

Recent documentation from 2022 reveals that access to purchase SpaceX shares was limited to a select group of investors. A significant portion of these authorized buyers possessed pre-existing connections to SpaceX founder Elon Musk, or demonstrated a history of strong support for his ventures.

The following entities were granted the ability to acquire shares:

Andreessen Horowitz (a16z) secured authorization to purchase approximately 4.3 million shares, totaling nearly $300 million. While not historically a major investor in SpaceX, a16z gained a substantial stake during the company’s $250 million funding round in August 2022, as reported by PitchBook. Furthermore, they led a $750 million round in 2023, valuing SpaceX at $137 billion, according to CNBC.

Marc Andreessen, a co-founder of the firm, has maintained a long-standing relationship with Musk within Silicon Valley’s tech circles. Over recent years, Andreessen has publicly voiced his admiration for Musk’s leadership at SpaceX, Tesla, and X, praising his entrepreneurial endeavors and resilience. He even engaged in a public debate on X with Vinod Khosla, a backer of OpenAI, following Musk’s lawsuit against the company, an exchange that garnered Musk’s attention.

Aliya Capital Partners, linked to the Aliya Growth Fund, was authorized to acquire over 1.4 million shares for close to $100 million. Aliya is a family office based in Miami, identifying SpaceX as one of its primary investments. The firm has invested in other prominent startups, including Figure AI, Impossible Foods, and Anduril, and contributed $360 million towards Musk’s acquisition of Twitter in 2022, as reported by Reuters. Despite subsequent workforce reductions and management changes at Twitter, Aliya remained optimistic about the platform’s potential.

Aliya has consistently expressed support for SpaceX’s vision. In April, coinciding with reports of Starlink’s cash burn, Aliya highlighted on LinkedIn the addition of 500,000 new Starlink subscribers in four months, bringing the total to over 2.7 million, attributing this growth to Musk’s strategic foresight and effective execution.

Gigafund, with a co-founder serving on the SpaceX board, was allocated over 1.4 million shares, representing an investment of nearly $100 million. Co-founded by Luke Nosek, a member of the PayPal “mafia” alongside Peter Thiel, Gigafund emerged after Nosek’s departure from Founders Fund in 2017. Nosek initially led Founders Fund’s investment in SpaceX, securing a board seat and maintaining it ever since. Gigafund’s co-founder, Stephen Oskoui, also previously worked at Founders Fund and has facilitated investments in other Musk-affiliated companies like Neuralink and the Boring Company.

137 Ventures, associated with 137 Holdings, received authorization to purchase just under 1.1 million shares, costing approximately $75 million. This VC fund specializes in secondary market purchases. Founders Justin Fishner-Wolfson and Alex Jacobson, both formerly of Founders Fund, played a key role in the firm’s initial SpaceX investment. Fishner-Wolfson advocated for a significantly larger investment than initially proposed by Musk, resulting in a substantial check from Founders Fund. He established 137 Ventures in 2011.

Point 2 Prove Investment was allocated 1 million shares, totaling $70 million. This entity appears to be a special purpose vehicle managed by the investment firm Vy Capital, according to SEC filings from July 2022. Founded by Alexander Tamas, who previously worked at Yuri Milner’s DST, Vy committed $700 million to Musk’s Twitter acquisition, as reported by Bloomberg. Vy also holds a stake in SpaceX and has invested in other Musk companies, including the Boring Company and Neuralink. Tamas has been lauded by Marc Andreessen and Ben Horowitz as a key figure in funding successful internet companies.

Atreides Management, through Atreides Special Circumstances Fund, was allocated nearly 429,000 shares at a cost of nearly $30 million. Gavin Baker, founder of Boston-based Atreides, has a long-standing relationship with SpaceX. Prior to founding Atreides in 2019, Baker spent 18 years at Fidelity, managing a $17 billion fund. He made his initial investment in SpaceX while at Fidelity, and in 2022, SpaceX was Atreides’ largest venture capital holding. Baker is also a vocal supporter of Musk, recently advocating for the reinstatement of his Tesla pay package and the relocation of Tesla’s incorporation to Texas.

TCP Exploration Fund 2022 was allocated over 357,000 shares for nearly $25 million. This fund is linked to LA’s Troy Capital Partners, founded by Myspace founder Josh Berman, according to SEC filings. However, Anthony Tucker, Troy’s managing partner, is credited with leading the firm’s SpaceX investment. Troy has been an investor since SpaceX’s Series J round in 2019, which valued the company at $28 billion. Troy also invested in Hyperloop One, a project inspired by Musk’s vision for high-speed underground transportation.

Additionally, two other investors were authorized to purchase approximately $50 million in shares combined, though limited documentation prevents a clear determination of their connections to Musk.

SpaceX and the aforementioned funds did not respond to multiple requests for comment, with the exception of Atreides, which declined to provide a statement.

Update: This article was originally published on June 19, 2024, and updated on January 1, 2025, to reflect SpaceX’s latest valuation.